A Sarasota author fights for her home FORECLOSURE: Racketeering

lawsuit could be legal road map for other borrowers

Liz Coursen walks through the unkept yard of her former residence on
Magnolia Street in Sarasota.STAFF PHOTO / DAN WAGNER

By MICHAEL POLLICK

Published: Tuesday, January 1, 2013 at 1:00 a.m.

Last Modified: Monday, December 31, 2012 at 8:54 p.m.

SARASOTA - Self-help author Liz Coursen was not looking to set a precedent when she decided to go after the big Wall Street investment bank that foreclosed on her Sarasota home. She just wanted her house back.

But JPMorgan Chase and Washington Mutual have tried to quash her federal racketeering lawsuit twice, so far without success, putting the Sarasota resident in the unlikely position of potential giant killer. If the suit proceeds and Coursen prevails, her case might serve as a legal roadmap for other borrowers.

Wall Street firms -- targeted in reams of litigation after they handed out billions of dollars during the real estate boom only to grab assets back during the recession -- have blocked most individual plaintiffs.

But not the 53-year-old author.

At least part of that is because of Coursen herself, who spent five lonely years acting as her own counsel in court. Her case, which alleges conspiracy and corporate deceit, gained more traction in recent months, thanks to Sarasota attorney Jacqulyn Mack, who specializes in consumer law and took the case last November.

"There are millions of other people in this position. Once lawyers get hold of new case law like this, they are just going to run with it," said Shari Olefson, a Fort Lauderdale real estate attorney and author of "Foreclosure Nation."

In essence, Coursen is alleging that the big Wall Street banks, their law firms and related foreclosure processors colluded to create the foreclosure on Coursen's former home, now an overgrown eyesore at the corner of Osprey Avenue and Magnolia Street.

"We call this scheme a manufactured default," said Nye Lavalle, a foreclosure fraud expert who is part of Coursen's legal team. "They manufacture the default so they can collect on it."

Christine Marlewski, an attorney for JP Morgan Chase, declined comment, and referred inquiries to Chase Bank, which said it does not comment on pending litigation.

Dual tracks

Coursen's problems with Washington Mutual began in early 2006, when the bank started tacking on hundreds of dollars each month to her mortgage payments.

Asked to explain, bank representatives pledged to research the charges and get back to her. They didn't, but Coursen kept paying her mortgage.

A few months later, Washington Mutual officials suggested that the self-help freelance writer -- whose books include "Self-Editing for the Self-Published Author" -- enter a forbearance program that would allow her to remain in her home until she sold it. The catch: A foreclosure case against her would proceed at the same time.

With about $180,000 left on her mortgage and the market value of her home at twice or perhaps three times that amount, Coursen agreed. She thought the bank, with whom Coursen said she had a relationship while living in Atlanta, wanted to work with her.

What she did not know at the time was that a Washington Mutual law firm, Shapiro & Fishman, was working separately to push through the foreclosure -- before Coursen could sell the home, her lawsuit alleges.

Coursen became convinced that she was being double-crossed in 2008, the year she found a buyer willing to pay $385,000.

Coursen said that after she told Washington Mutual about the deal, Shapiro & Fishman filed a motion with the Sarasota circuit court to speed up the foreclosure sale. Coursen's buyer bolted.

Coursen responded to the setback by boning up on real estate law and playing private detective. In time, she began acting as her own attorney in an effort to stave off an eviction she felt was looming.

"I can't tell you how many hours it took me in the law library," said Coursen, an English major in college whose fifth book, "Having Fun Wish You Were Here! An Illustrated History of the Postcard in Florida," is set for publication in January.

Her effort to keep her house was in vain. Her lenders got title to it on March 28, 2012, following a foreclosure auction. She left a few days later.

What she still has is a case that is taking on the nation's largest bank in federal court.

"People don't generally have the resources or perseverance for it," said Olefson, the Fort Lauderdale attorney.

Twists and turns

Coursen's self-taught legal education could not prepare her for the twists and complexities that the case would take.

First came the question of who actually owned the mortgage when the foreclosure began: Washington Mutual, Chase Bank, or the Federal National Mortgage Corp., better known as Fannie Mae.

The issue became murky in 2008, when Washington Mutual got hit with a run on deposits and went searching for a bailout. Seized by the government, the troubled bank was sold to JP Morgan for $1.9 billion in late 2008.

But Mack, Coursen's attorney, contends that neither entity held the mortgage; instead, it had been sold two years earlier to government-sponsored Fannie Mae.

The date of that sale could be significant because on Oct. 23, 2006, Dory Goebel, an employee of Lender Processing Services, signed an affidavit that stated Washington Mutual owned Coursen's mortgage.

Coursen's suit contends that the affidavit was among tens of thousands that Goebel and other Lender Processing employees filed on behalf of clients like Fannie Mae and Washington Mutual. In many cases, those documents were fabricated, part of a larger "robo-signing" phenomenon that authorized lenders to seize properties even when they lacked proper documentation.

Mack says that Coursen's mortgage represents just one example: "We have a great deal of evidence," the attorney said of the alleged mortgage misfeasance.

A national settlement

Coursen's federal suit was filed in March, the same month the nation's five largest mortgage lenders agreed to pay $25 billion to settle claims they had abused the foreclosure process.

That settlement, the largest involving a single industry since a 1998 multistate deal against cigarette makers, was aimed at reducing loans for nearly one million households.

Under the agreement, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial acknowledged that hundreds of thousands of their customers were improperly foreclosed upon, through the use of fake signatures or improper paperwork.

JPMorgan Chase alone was liable for $5 billion.

Meanwhile, Lender Processing Services this summer signed a $2 million plea deal to settle criminal robo-signing allegations against it in Missouri. The business also pledged to cooperate in ongoing criminal investigations in other states.

The residual sentiment from the settlement -- and the abuses that contributed to it -- still resonate, experts say. If that holds, some feel it could favor Coursen in court.

"We are still in the middle of an anti-banking climate," said Olefson, the attorney and "Foreclosure Nation" author.

'Pattern of racketeering'

U.S. District Judge Richard Lazzara, a former assistant state attorney and judge from Hillsborough County, already has indicated he is taking Coursen's case seriously.

He has twice turned down the lenders' efforts to remove themselves from the lawsuit or dismiss the litigation.

The federal judge -- nominated to the bench by President Bill Clinton -- ordered that Lender Processing and Fidelity National Financial, a mortgage services provider and one-time owner of Lender Processing, remain defendants.

"The pattern of racketeering included at least two acts, transmission through the use of mail of fake assignments of mortgage and fictitious corporate signatures," the judge wrote in a 14-page order issued in early August. Coursen "must be afforded the opportunity to prove the allegations through the discovery process."

Ronald M. Gache, an attorney representing Shapiro, denied the firm engaged in any wrongdoing. He says there was no conspiracy.

"Shapiro merely used the legal process to accomplish a foreclosure of the mortgage, for which plaintiff had defaulted -- the result for which a foreclosure action is intended," Gache wrote in court documents.

Michel O. Weisz, the attorney representing Fidelity National, said on behalf of Goebel, the one-time Fidelity National employee, that Coursen had not been damaged. Both the firm and Goebel also denied any conspiracy.

For her part, Mack, Coursen's lawyer, contends that the judge's ruling regarding the racketeering counts will allow her greater freedom to explore motives in the discovery process. She expects to demonstrate "a conspiracy to divest people of their property using sham pleadings and fabricated evidence."

Six years after the foreclosure, Coursen still believes Washington Mutual and JPMorgan could have avoided the protracted litigation by simply modifying her 15-year loan before it became technically delinquent, and before the weeds grew tall and the tree branches began to fall to the ground.

A sign taped to the glass on Coursen's former front door says JPMorgan Chase is in charge of the house. For Coursen, the sign is a tangible reminder of why she keeps pushing forward on a suit now slated for trial in September.

"There's a deliberateness to this situation, which, once accepted, seems to explain everything."

<p><em>SARASOTA</em> - Self-help author Liz Coursen was not looking to set a precedent when she decided to go after the big Wall Street investment bank that foreclosed on her Sarasota home. She just wanted her house back.</p><p>But JPMorgan Chase and Washington Mutual have tried to quash her federal racketeering lawsuit twice, so far without success, putting the Sarasota resident in the unlikely position of potential giant killer. If the suit proceeds and Coursen prevails, her case might serve as a legal roadmap for other borrowers.</p><p>Wall Street firms -- targeted in reams of litigation after they handed out billions of dollars during the real estate boom only to grab assets back during the recession -- have blocked most individual plaintiffs.</p><p>But not the 53-year-old author.</p><p>At least part of that is because of Coursen herself, who spent five lonely years acting as her own counsel in court. Her case, which alleges conspiracy and corporate deceit, gained more traction in recent months, thanks to Sarasota attorney Jacqulyn Mack, who specializes in consumer law and took the case last November.</p><p>"There are millions of other people in this position. Once lawyers get hold of new case law like this, they are just going to run with it," said Shari Olefson, a Fort Lauderdale real estate attorney and author of "Foreclosure Nation."</p><p>In essence, Coursen is alleging that the big Wall Street banks, their law firms and related foreclosure processors colluded to create the foreclosure on Coursen's former home, now an overgrown eyesore at the corner of Osprey Avenue and Magnolia Street.</p><p>"We call this scheme a manufactured default," said Nye Lavalle, a foreclosure fraud expert who is part of Coursen's legal team. "They manufacture the default so they can collect on it."</p><p>Christine Marlewski, an attorney for JP Morgan Chase, declined comment, and referred inquiries to Chase Bank, which said it does not comment on pending litigation.</p><p>Dual tracks</p><p>Coursen's problems with Washington Mutual began in early 2006, when the bank started tacking on hundreds of dollars each month to her mortgage payments.</p><p>Asked to explain, bank representatives pledged to research the charges and get back to her. They didn't, but Coursen kept paying her mortgage.</p><p>A few months later, Washington Mutual officials suggested that the self-help freelance writer -- whose books include "Self-Editing for the Self-Published Author" -- enter a forbearance program that would allow her to remain in her home until she sold it. The catch: A foreclosure case against her would proceed at the same time.</p><p>With about $180,000 left on her mortgage and the market value of her home at twice or perhaps three times that amount, Coursen agreed. She thought the bank, with whom Coursen said she had a relationship while living in Atlanta, wanted to work with her.</p><p>What she did not know at the time was that a Washington Mutual law firm, Shapiro & Fishman, was working separately to push through the foreclosure -- before Coursen could sell the home, her lawsuit alleges.</p><p>Coursen became convinced that she was being double-crossed in 2008, the year she found a buyer willing to pay $385,000.</p><p>Coursen said that after she told Washington Mutual about the deal, Shapiro & Fishman filed a motion with the Sarasota circuit court to speed up the foreclosure sale. Coursen's buyer bolted.</p><p>Coursen responded to the setback by boning up on real estate law and playing private detective. In time, she began acting as her own attorney in an effort to stave off an eviction she felt was looming.</p><p>"I can't tell you how many hours it took me in the law library," said Coursen, an English major in college whose fifth book, "Having Fun Wish You Were Here! An Illustrated History of the Postcard in Florida," is set for publication in January.</p><p>Her effort to keep her house was in vain. Her lenders got title to it on March 28, 2012, following a foreclosure auction. She left a few days later.</p><p>What she still has is a case that is taking on the nation's largest bank in federal court.</p><p>"People don't generally have the resources or perseverance for it," said Olefson, the Fort Lauderdale attorney.</p><p>Twists and turns</p><p>Coursen's self-taught legal education could not prepare her for the twists and complexities that the case would take.</p><p>First came the question of who actually owned the mortgage when the foreclosure began: Washington Mutual, Chase Bank, or the Federal National Mortgage Corp., better known as Fannie Mae.</p><p>The issue became murky in 2008, when Washington Mutual got hit with a run on deposits and went searching for a bailout. Seized by the government, the troubled bank was sold to JP Morgan for $1.9 billion in late 2008.</p><p>But Mack, Coursen's attorney, contends that neither entity held the mortgage; instead, it had been sold two years earlier to government-sponsored Fannie Mae.</p><p>The date of that sale could be significant because on Oct. 23, 2006, Dory Goebel, an employee of Lender Processing Services, signed an affidavit that stated Washington Mutual owned Coursen's mortgage.</p><p>Coursen's suit contends that the affidavit was among tens of thousands that Goebel and other Lender Processing employees filed on behalf of clients like Fannie Mae and Washington Mutual. In many cases, those documents were fabricated, part of a larger "robo-signing" phenomenon that authorized lenders to seize properties even when they lacked proper documentation.</p><p>Mack says that Coursen's mortgage represents just one example: "We have a great deal of evidence," the attorney said of the alleged mortgage misfeasance.</p><p>A national settlement</p><p>Coursen's federal suit was filed in March, the same month the nation's five largest mortgage lenders agreed to pay $25 billion to settle claims they had abused the foreclosure process.</p><p>That settlement, the largest involving a single industry since a 1998 multistate deal against cigarette makers, was aimed at reducing loans for nearly one million households.</p><p>Under the agreement, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial acknowledged that hundreds of thousands of their customers were improperly foreclosed upon, through the use of fake signatures or improper paperwork.</p><p>JPMorgan Chase alone was liable for $5 billion.</p><p>Meanwhile, Lender Processing Services this summer signed a $2 million plea deal to settle criminal robo-signing allegations against it in Missouri. The business also pledged to cooperate in ongoing criminal investigations in other states.</p><p>The residual sentiment from the settlement -- and the abuses that contributed to it -- still resonate, experts say. If that holds, some feel it could favor Coursen in court.</p><p>"We are still in the middle of an anti-banking climate," said Olefson, the attorney and "Foreclosure Nation" author.</p><p>'Pattern of racketeering'</p><p>U.S. District Judge Richard Lazzara, a former assistant state attorney and judge from Hillsborough County, already has indicated he is taking Coursen's case seriously.</p><p>He has twice turned down the lenders' efforts to remove themselves from the lawsuit or dismiss the litigation.</p><p>The federal judge -- nominated to the bench by President Bill Clinton -- ordered that Lender Processing and Fidelity National Financial, a mortgage services provider and one-time owner of Lender Processing, remain defendants.</p><p>"The pattern of racketeering included at least two acts, transmission through the use of mail of fake assignments of mortgage and fictitious corporate signatures," the judge wrote in a 14-page order issued in early August. Coursen "must be afforded the opportunity to prove the allegations through the discovery process."</p><p>Ronald M. Gache, an attorney representing Shapiro, denied the firm engaged in any wrongdoing. He says there was no conspiracy.</p><p>"Shapiro merely used the legal process to accomplish a foreclosure of the mortgage, for which plaintiff had defaulted -- the result for which a foreclosure action is intended," Gache wrote in court documents.</p><p>Michel O. Weisz, the attorney representing Fidelity National, said on behalf of Goebel, the one-time Fidelity National employee, that Coursen had not been damaged. Both the firm and Goebel also denied any conspiracy.</p><p>For her part, Mack, Coursen's lawyer, contends that the judge's ruling regarding the racketeering counts will allow her greater freedom to explore motives in the discovery process. She expects to demonstrate "a conspiracy to divest people of their property using sham pleadings and fabricated evidence."</p><p>Six years after the foreclosure, Coursen still believes Washington Mutual and JPMorgan could have avoided the protracted litigation by simply modifying her 15-year loan before it became technically delinquent, and before the weeds grew tall and the tree branches began to fall to the ground.</p><p>A sign taped to the glass on Coursen's former front door says JPMorgan Chase is in charge of the house. For Coursen, the sign is a tangible reminder of why she keeps pushing forward on a suit now slated for trial in September.</p><p>"There's a deliberateness to this situation, which, once accepted, seems to explain everything."</p>